Despite recent reforms, Azerbaijan’s banking system remains somewhat limited and is relatively small in comparison to the country's GDP. The Central Bank of Azerbaijan regulates all monetary policy and banks in the country. While some banks in Azerbaijan remain state owned, a privatisation drive has been in effect in the post-Soviet era, and a number of international banks have also opened local branches.
Money in Azerbaijan
The local currency of Azerbaijan is the Azerbaijani Manat (AZN), which is divided into 100 qapik.
Notes: AZN 1, AZN 5, AZN 10, AZN 20, AZN 50, AZN 100, AZN 200
Coins: 1 qapik, 3 qapik, 5 qapik, 10 qapik, 20 qapik and 50 qapik
New arrivals can easily exchange foreign currency, such as euros, pounds sterling and US Dollars, for the local manat at the airport, banks and major hotels. On the other hand, getting hold of foreign currency in Azerbaijan is becoming more difficult as the Central Bank has been imposing increased regulations.
Banking in Azerbaijan
There are numerous options for expats when it comes to banking in Azerbaijan. Although there are many local banks, a number of international banks entered the market in the post-Soviet era, and these offer the best and most reliable option for expats.
Opening a bank account
Not all expats will need to open a local account. This includes expats on short-term stays or those who can receive salaries in their existing international bank account. However, expats who wish or need to open a local bank account can do so easily, and it’s usually free. Expats wanting to open a bank account in Azerbaijan are advised to try to open one with a well-established international bank.
Credit cards and ATMs
Although credit cards are becoming more popular, Azerbaijan remains mostly a cash-based society. Most major hotels and restaurants in Baku will accept international credit cards.
ATMs are available in Baku and other major towns, and these usually accept foreign-issued bank cards. Most ATMs are inside banks, but some can be found in supermarkets and hotels.
It’s possible to pay most utility bills at an ATM in Azerbaijan.
Taxes in Azerbaijan
All residents in Azerbaijan are taxed on their worldwide income, while non-residents are taxed only on their income derived in Azerbaijan. A resident is defined as an individual who has been physically present in Azerbaijan for a cumulative period of 182 days or more in a calendar year.
The tax year in Azerbaijan runs from 1 January to 31 December.
Expats working in the non-governmental and non-oil-gas sectors may be eligible for a reduced personal income tax rate. Azerbaijan has further special tax regimes for the oil and gas sector, as well as double taxation treaties with many countries.
Given that tax regulations in Azerbaijan are subject to change and can be confusing, we recommend that newcomers consult a tax specialist who has experience working with expats to remain on the right side of the law.